Key benefits of choosing EMI option for health insurance policy

The pandemic has been a game-changer for the world. Where earlier the notion was that the younger population are safer from ailments, COVID-19 established that medical issues fancy no age group or gender. This realization led to the need to consider a shield, i.e. health insurance policy, a vital investment that is still far from most people of India owing to the high one-time payment against the coverage.

Therefore, to make it cost-effective for all, in 2019, the Insurance Regulatory and Development Authority of India (IRDAI) directed the coverage companies to start accepting health insurance premium payments in EMI or monthly installments.
This measure was well received as the nearly 30 percent or 42 crore of the nation's population devoid of any health insurance, as per a survey done by the NITI Aayog could now buy a health insurance policy.

Understanding the EMI option

This development is certainly beneficial for all income groups as it gives the health insurer a choice to opt from different payment forms and select the periodicity of the instalment mode, i.e. monthly, quarterly, or half-yearly or yearly at the time of buying the policy. Basis the defined tenure, a fixed amount towards the policy is deducted.

For instance, a person aged 39 years opting for a cover amount of Rs 1 crore will have to pay a premium of nearly Rs 1,059/ month as against Rs 12,703 annually. Hence, by selecting the flexible payment option, people can protect themselves and their families against health and medical-related expenses, which can undoubtedly be exorbitant in the country.

But, one thing to note here is that the ease of payment time frame once fixed cannot be changed easily. So, understand the terms and conditions and evaluate them against your financial feasibility.

Know the benefits of the EMI alternative

• Take Higher Coverage

With newer maladies, procedures, and advancements in science, it is advisable to take a health insurance policy that adequately covers pre and post-hospitalization charges, ambulance expenses, etc. Hence, paying a medical insurance premium in parts rather than one time makes it possible for policyholders to opt for high-sum insured plans without denting their pockets.

• Accessibility and Cost-effective Medical treatment

With the health insurance wing of companies not spread across the length and breadth of the country, buying medical protection for people living in small towns and cities has been a continual challenge. But with the option of purchasing the policy online along with the EMI possibility that suits their budget, it is now both convenient and affordable for buyers to secure themselves against highly-priced medical treatment. Moreover, a good health insurance plan combined with the ease in the premium payment on instalment makes it more manageable to carry any health-related expenses.

• Protects senior citizens

As one grows old, they become vulnerable to ailments and thus, the need for a comprehensive health insurance plan arises. But with age also comes the retirement stage, and therefore, blocking significant money on a health policy becomes questionable. Thus, the monthly payment alternative acts as a boon that makes it possible for senior citizens to pick higher premiums coverage notwithstanding their savings.

• Buy policy younger

If one on hand, the EMI option is beneficial for old age, then it also is for younger people. When young, the risk of diseases is lower because of which the EMI on the premium will automatically be less. Thus if bought timely, it will enable maintaining the policy longer and insurance coverage higher.

• Tax privileges

Under Section 80D of the Income Tax Act of 1961, the premium paid for health insurance can be claimed. The tax benefits can be up to Rs 25,000 for persons below 60 years of age and Rs 50,000 for those above 60 years of age.

To recapitulate, switching to the EMI option for a health insurance policy unquestionably comes packed with benefits that will guard you and your loved ones against probable medical expenses. In addition, the payment of the premium fee is simple, too, as the insurer has the option to choose an auto-debit mandate to ensure policy continuity and regularity of the fee.

Despite the pros, it is recommended that before buying, always compare different plans based on speedy claim settlement, extensive coverage, reinstatement benefits, and more. Also, check on the premium that you would pay for different periods. Though there won't be much difference in most cases, some companies might charge you a slightly higher. You can get all this information online with some websites even letting you buy directly from them. A word of caution, if purchasing online, go for a reliable website than the one offering a cheaper policy because you cannot compromise on your health.

The author, Amit Chhabra, is Head-Health Insurance at Policybazaar.com. The views expressed are personal